Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
I will be happy to assist you. First, you are responsible for the entire debt as a co-signer of the loan. The bank can pursue collection from you just as if you were the original borrower.
Chapter 13 is a repayment plan of 3-5 years, but it does not pay off the entire debt. The plan is set up to repay secured creditors first, and unsecured creditors last. The unsecured creditors receive pennies on the dollar, not their entire debt paid off.
In Illinois if two or more individuals own property that is exempt as a homestead, the value of the exemption of each individual may not exceed his or her proportionate share of $15,000 based upon the percentage of ownership. A homestead residence is protected up to $7,500.00 if only owned by one person so if your home is paid off this leaves a lot of equity open to judgment creditors and would not be protected in bankruptcy Chapter 7 over the $15,000.00/%7,500. Bankruptcy does not appear to be a good option for you. In order to place a lien they can only go after property that is in your name as well.
Realize that in order for GMAC to place a lien on your property they must first sue you and win in Court. Until that is done and they receive a judgment they cannot lien anything. No matter what they threaten until they receive a judgment no assets can be attached. You would have to be served a summons and complaint so you will know when this happens.